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« The eBay Index for the price of Gold | Main | Happy Christmas and a Precious Metals New Year »

Randgold Resources Limited: A Christmas PUT!

Randgold Puts 23dec08

Today we purchased a few PUT Options on Randgold Resources Limited, which were the JAN 2009 Puts with a strike price of $40.00, for $2.90 per contract. Randgold Resources Limited was trading at around $41.00 at the time of this purchase.

We normally don’t trade in this festive period as various oddities can appear from Santa’s sack! So we have only purchased a small number of these contracts, which may amuse you over the holidays if you are the sort of person who is addicted to the computer screen and just has to have a look and see what is going on.

We chose Randgold because in a little over a month this stock has risen from $26.00 to just north of $40.00 which is terrific as we hold it as part of our core portfolio. However such an increase over a short time frame we believe will entice traders to take profits and bank them so that they can hit the champagne trail with a clean slate.

However these PUTS do expire in mid January so this is a hit and run trade and we could well close the trade early if it goes the right way for us.

All the best!

Randgold has a market capitalisation of $3.13 billion, a P/E ratio of 66.03 with 76.50 million shares outstanding. The average volume of shares traded is 1.21 million per day. This stock has a 52 week high of $56.28 and a 52 week low of $22.28.

Randgold Resources Limited trades on the NASDAQ under the symbol of GOLD and on the London Stock Exchange under the symbol of RRS.

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